ASIC Crackdown on Greenwashing

The Australian Securities and Investments Commission (ASIC) has developed a new focus on ‘greenwashing’, declaring it to be one of their enforcement priorities in 2023. ASIC is committed to addressing all concerns or allegations of misleading and deceptive conduct, with ASIC Deputy Chair Sarah Court stating that “Greenwashing is simply misleading and deceptive conduct by another name”.

‍

What is ‘greenwashing’?

‘Greenwashing’ involves an organisation misrepresenting their sustainability or environmental practices. This enables organisations to mislead consumers into believing that the organisation's products or operations are more environmentally friendly than they actually are.

‍

ASIC intervention

ASIC has increased surveillance of marketing and advertising material, disclosure documents and product disclosure statements for any signs of ‘greenwashing’.

Enforcement actions undertaken by ASIC against organisations found to be engaging in ‘greenwashing’ include warnings at the first instance, and those may be followed by requirements for corrective disclosures, infringement notices or the commencement of civil penalty proceedings in the Federal Court.

The first action was commenced in February for misleading statements concerning the sustainable nature of certain superannuation investment options, with further proceedings being commenced in July and August respectively, each concerning misrepresentative ESG claims.

‍

How to avoid engaging in misleading conduct

There are a number of steps organisations can take to avoid engaging in ‘greenwashing’, including:

• Ensuring disclosure documents, marketing and advertising material and any other public-facing documents are free from misleading, inaccurate or unsubstantiated statements.
• Ensuring that your company’s ESG claims are factually accurate and substantiated by evidence.
• Avoiding using vague or broad sustainability-related terminology (for example, ‘Carbon Neutral’). If broad terminology is being used, provide a clear and detailed explanation as to what these terms mean.
• ASIC Information Sheet 271 (How to avoid greenwashing when offering or promoting sustainability-related products) has more information on how to ensure your organisation is not engaging in ‘greenwashing’ activities.

‍

This article includes general information only and is not specific to your situation.

If you require assistance in relation to anything contained within this article, please contact us.